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PepsiCo Gets Crafty With New 'Stubborn Soda' Brand

Beverage Giant Steps Further Into Segment That Takes Page From Beer Category

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Here's more evidence that the craft beer boom is spilling into soda: PepsiCo today confirmed that it will soon launch a new line of craft sodas called "Stubborn Soda," that will be sold at fountains at select foodservice accounts.

The launch follows the recent introduction of Pepsi's Caleb's Kola and Mountain Dew Dewshine, which are also meant to play in the burgeoning craft soda space. Stubborn will come in flavors including black cherry with tarragon, classic root beer, lemon berry acai, agave vanilla cream, orange hibiscus and pineapple cream, a PepsiCo spokeswoman confirmed in an email.

"Following our recent launches of Caleb's Kola and Mountain Dew Dewshine, we're continuing to explore the craft space with Stubborn Soda and its unique, contemporary flavor profiles," she said. "Introducing it on fountain with an engaging piece of innovative equipment offers consumers a new take on the traditional soft-drink experience while also creating value for customers."

PepsiCo did not disclose its marketing or ad plans for Stubborn, which is considered to be in an "incubation phase."

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The launch was first reported by Beverage Digest, which noted that while craft beers have gained significant traction, interest in craft sodas is relatively new, and "there is no consensus, at least yet, as to exactly what 'craft' means in the [soda] world." However, the publication noted that the use of sugar as a sweetener and glass bottles "seem to be common."

Pepsi's Stubborn brand will be made with "fair trade certified cane sugar and natural flavors," according to PepsiCo. And in an apparent nod to beer, Pepsi has created a new fountain equipment for the brand that includes a "tap-like pouring ritual." Caleb's Kola, which was introduced in late 2014, will also be available in the new machines.

Caleb's is made from cane sugar, kola nuts from Africa, spices and a hint of citrus. PepsiCo CEO Indra Nooyi plugged the brand at a Beverage Digest conference last year saying that "I think there is actually a huge potential for craft cola." She added that "people still love the cola taste -- it's just lost some of its cool factor and I think products like Caleb's are bringing back some of the cool factor."

Still, it remains to be seen just how big of market there is for craft sodas. In the beer industry, crafts have gotten a ton of attention in recent years and have enjoyed consistently strong year-over-year growth. But traditional brands like Bud Light still dominate when it comes to market share. The Brewer's Association, which represents craft brewers, estimated that craft brews account for $19.6 billion of the $101.5 billion U.S. beer market.

Beverage Digest noted that Stubborn will likely supplement, not replace, mainstream brands in food service accounts, as outlets would "likely want to keep selling Pepsi, Diet Pepsi, Mtn Dew and other big brands."